Fresno City Councilmembers Miguel Arias and Garry Bredefeld sent a letter to the California Attorney General's Office calling for an investigation into executive compensation and foreign investments. (GV Wire Composite/Eric Martinez)
- Fresno City Councilmembers Miguel Arias and Garry Bredefeld call on state AG to look into Valley Children's financials.
- Councilmember Bredefeld says he has heard from hospital employees that poor staffing has delayed surgeries.
- Valley Children's has international investments, as does Community Health and the city of Fresno.
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Questions about Valley Children’s high level of executive compensation have spurred Fresno City Councilmembers Garry Bredefeld and Miguel Arias to call for an inquiry from the California Attorney General’s Office.
“We write to you today to share our deep concern and dismay at revelations surrounding Valley Children’s Hospital and its related organizations,” the letter states. “Last week news reports revealed a disgraceful scheme of gross overcompensation of Valley Children’s Hospital Chief Executive Officer Todd Suntrapak and another 27 executives.”
In addition, GV Wire has learned that the nonprofit Valley Children’s holds a $33 million fund for some members of its executive team — a practice common to the industry.
Related Story: Records Show That Valley Children’s Leader Suntrapak’s Pay Exceeds ...
Valley Children’s Holds Investments
In 2020 and 2021, compensation for Valley Children’s CEO Todd Suntrapak exceeded $5 million, according to IRS documents — far higher than many other children’s hospital executives across the nation.
In 2021, executive pay totaled $26.95 million.
At the same time, Bredefeld told GV Wire that hospital staff has reached out to him telling him of problems with staffing and equipment at the hospital.
“What they let me know is surgeries aren’t being scheduled they don’t have enough staff, clinics are old, they don’t have enough room to see patients, the elevators don’t work, and that’s just some of what they’ve shared with me,” Bredefeld said.
Financial records also show the hospital’s community benefits fund, which includes charity care, lags behind that of other similar hospitals.
Related Story: While Valley Children’s Executives Earn Millions, Community Benefits Lag
Valley Children’s has maintained that Suntrapak’s compensation reflects an accounting anomaly that reported two bonuses in one year.
“Executive compensation at Valley Children’s is determined through rigorous, independent review processes,” said Michael Hanson, board of trustees chair for the hospital, in a statement. “Our decisions are guided by industry standards and aimed at attracting and retaining top talent necessary to uphold our commitment to excellence in healthcare.”
Valley Children’s Foreign Investments Need Transparency: Bredefeld
The hospital also reported $124.5 million in investments in the Caribbean, Central America, and Europe. Arias and Bredefeld called on the attorney general investigation because it’s not known whether those investments include money from Medi-Cal.
“Due to a severe lack of transparency from hospital management, it is unclear if the offshore assets include Medi-Cal proceeds, which covered 74% of patient visits in 2022,” their letter stated.
Valley Children’s holds a diversified global investment portfolio, as do many other hospitals, said Zara Arboleda, chief communications officer for Valley Children’s.
“This investment provides earnings to fund strategic and operational investments and ensure long-term financial viability so we can meet our mission to provide healthcare to children in perpetuity,” Arboleda said in an email.
A look by GV Wire into Fresno-based Community Health Systems and Memphis-based St. Jude Children’s Research Hospital also showed foreign investments.
In 2021, Community Health’s investments in Central America totaled $38.9 million. The hospital has $2.9 billion in assets.
With $9.5 billion in assets, St. Jude had global investments totaling $25.1 million.
Meanwhile, the city of Fresno’s employee retirement system allocates 21.8% of its assets to international equity, according to its December 2023 report.
Valley Children’s, with $2 billion in assets, had $124.5 million in foreign holdings.
“Fund strategies include public equity, private equity, growth equity, and hedge funds,” Arboleda said. “A minority of the funds reported under international investments are actual international investment funds.”
A Lucrative Benefit for Some Valley Children’s Execs
In addition to compensation, the hospital holds more than $33 million in a retirement fund for some of its executives Suntrapak’s fund is $11 million. If he leaves, the fund has to be paid back, according to IRS documents.
Life insurance policies for members of a C-Suite are common and the details of the benefits can vary widely. The employer is often the beneficiary of those policies and are used as incentives to keep the employee at the company. They sometimes are purchased as life insurance policies.
Michigan State in 2016 famously loaned legendary coach Jim Harbaugh $14 million to pay the premiums on a life insurance policy, according to Schechter Wealth. As long as the policy remains intact, that debt would be repaid with the benefit.
Recipients can borrow against the fund at a very lucrative rate to invest in real estate or other securities.